Weakness in Eurozone Leaves U.K. Economy More Dependent on Its Own Consumers

LONDON—The British people are growing less confident about the economy’s prospects, two recent data releases show, despite the U.K. continuing to deliver better economic performance than many other big Western economies.

Data released Friday by market-research firm GfK Group found British consumers were gloomier than they were a month ago about the economy’s prospects over the next year. GfK’s measure of confidence, about how the economy will fare over the coming 12 months, fell in October compared with the month before. GfK’s overall consumer confidence indicator, which factors in how people felt about the previous 12 months, dipped as well, to a reading of -2 from -1.

Figures released Thursday by the European Commission and measuring overall economic sentiment in Britain, including businesses as well as consumers, show a similar pattern. The commission’s Economic Sentiment Indicator fell in October for the fifth month in a row.

The worsening economic sentiment in the U.K. marks a contrast to elsewhere in Europe, where businesses and consumers across the 18 countries that share the euro became slightly more upbeat about their prospects during October, according to the commission. That reverses the falling confidence of recent months.

The British economy had seen a recent rapid expansion after years of little or no growth, and is set to be the fastest-growing economy in the Group of Seven industrialized nations this year, according to the International Monetary Fund.

But the rate of growth cooled in the third quarter and analysts expect the economy will continue to slow during the rest of the year. A key problem for the U.K. is the weak economic performance of the neighboring eurozone, Britain’s biggest trading partner, which has left the U.K. economy more dependent on its own consumers.

When it comes specifically to consumers, however, the European Commission’s figures paint a more positive picture. The commission generates its figures based on raw data from GfK but it provides a more forward-looking seasonally adjusted indicator.

Based on its analysis, the commission found confidence among U.K. consumers actually increased slightly for the month of October, instead of the decline measured by GfK, when adjusted to take into account seasonal patterns. Still, the commission’s data agrees with GfK on the overall economic sentiment, when factoring in gloomier sentiment in the services and construction sectors.